Airports in Africa are paying closer attention to travel retail as they realise aviation charges alone cannot offset rising capital investment costs to fund terminal infrastructure developments.
Speaking to TRBusiness in the October edition, ACI Africa Secretary General Ali Tounsi acknowledges that while African airports still rely hugely on aeronautical income as the primary source of revenue, mindsets are changing.
“Fortunately, we have observed a paradigm shift during the past few years and African airports are become more and more revenue conscious and turning gradually to non-aeronautical revenue streams because of the higher profit margin, greater financial stability and sustainability as well as the capacity to withstand traffic volatility to some extent,” he commented.
Retail concessions across the continent’s airports currently account for roughly 33% of total non-aeronautical revenue generation, which remains low compared to other regions.
According to Tounsi, airport infrastructure capacity remains the biggest challenge to airports and aviation, not least in Africa.
Notwithstanding this, he says the ‘wave of privatisation’ being witnessed in Africa has translated into higher non-aeronautical revenue spending in many cases.
“It is therefore encouraging to note that new passenger terminal infrastructure being set up in Africa recently [allows for] significant duty free and travel retail areas, thus underlying the growing importance of this revenue-generating stream in African airport business models,” he continued.
“Commercial sales can be a stable source of revenue that can help recover operating costs and reduce a reliance on aviation taxes for future airport development.
“The commercial side of the airport business in Africa has undoubtedly plenty of opportunities to offer. This is why ACI Africa has deemed it opportune to collaborate with MEADFA and ETRC to develop the right strategy to grow the commercial market in aviation in Africa.”
International passenger volumes in Africa grew by 8.3% in the first half of the year, driving most of the total 7.1% increase in the region’s traffic, according to data from ACI World.
“Although aviation in Africa is experiencing a bumpy ride, it has the potential to grow significantly in the years to come, provided that markets open up,” added Tounsi.
“Further liberalisation and competition throughout all sectors of the air transport value chain would enable access to new markets, both within the continent and on an intercontinental basis.”
Read the full interview with ACI Africa Secretary General Ali Tounsi in the October issue of TRBusiness, available from the press racks during this week’s TFWA World Exhibition & Conferences in Cannes.